Plaid announced today that it has named Meta veteran John Anderson as its new Head of Payments.
The fintech startup is expanding its offerings beyond its core account linking product. It entered at the beginning of this year Identity and income verification. Payments seem to be a natural evolution of the business.
In an interview with TechCrunch, Anderson Plaid explained that while it will facilitate payments privately through its transfer offering, it will continue to work with a number of its payment partners, including Square, Stripe, Marketa, Gusto and Silicon Valley Bank. The ultimate goal is to give consumers more choice when it comes to bank payments.
There has been a lot of innovation in POS. [point of sale] In the last 10 years, but digital-only — no physical interaction — experiences for payments are still nascent,” he said. “That’s where we’re focused.”
In its own way, Anderson said, Plaid has been involved in digital payments for years, enabling nearly a billion ACH transactions such as account funding and account-to-account transfers. Along the way, the company has partnered with nearly 50 payment companies.
In other words, Plaid has services for customers ranging from account verification to risk assessment and processing. It modularized its data products with the goal of “increasing choice” for customers and “ultimately expanding the use of bank payments.”
“Last year at this time, same-day ACH was up nearly 75% year-over-year into the trillions — that’s a huge increase over the previous big number,” Anderson said. “There’s a lot of market for a lot of players and General Plaid works with a lot of payment partners. We plan to invest in that ecosystem and strategy.”
So when it comes to payments in general, Andersen said, Plaid is focused on building products that help companies have “more cost-effective, efficient and flexible bank payments.”
“Ultimately, most of the work is done by our partners because we want to increase choice for consumers and businesses,” he said. “That’s why we’re taking an ecosystem approach to payments. We’re not working with them, but ‘us’ to innovate and build a better infrastructure that’s safer, smarter and faster for all participants.”
As mentioned, one of Plaid’s payment partners, Frenemy Stripe, launched its own new product in May. Specifically, Stripe’s financial connections are designed to give the company’s customers a way to connect directly to their customers’ bank accounts, to access financial information to expedite or process certain types of transactions — just as Plaid has historically done.
In working with its payment partners over the years, Anderson Plaid says it’s seen a constant challenge — often taking several days to complete an ACH transfer.
“That’s because it provides settlement time to cover returns and fraud,” he said. But transfer speeds are very limited for many of our customers – if you’re someone like Robinhood who wants to fund customers instantly and start trading right away, 2-3 day ACH clearing time feels like a lifetime,” he said.
Attempting to solve that challenge led to the genesis of Plaid Signal Supply, which is the USIS machine learning to analyze more than 1,000 risk factors and provide points and insights, Plaid “provides greater certainty that a transaction will be resolved” so a company can accelerate access to those funds without increasing risk.
“We want to use intelligent data signals so we can immediately clear low-risk ACH funding events,” he said. “By accurately predicting risk and fraud, we can help companies build more real-time financial solutions so their consumers can immediately pursue their financial goals.
Signal is exiting beta today with Robinhood as a pilot client. In addition to Robinhood, fintechs like WeBull and Uphold have incorporated the signal into their risk models to “unlock faster ACH,” Anderson said.
“We currently de-risk about 3 million transactions worth about $1.5 billion every month,” he said. “We’re excited to offer this service to more customers and encourage more secure execution of ACH-based bank payments and transfers.”
Looking ahead, Plaid is actively building and partnering on real-time payment rails.
Plaid’s RTP and FedNow products are designed to make bank payments more accepted, Anderson said, “not only through speed and certainty, but also through further innovation in the financial and payments ecosystem.”
“We want to unlock the next level of banking payments by focusing on a great consumer experience, adapting signals for risk and fraud vectors, and other activities that accelerate the adoption of real-time payments by our payment partners and US customers,” said Anderson.
Also, in an interview with TechCrunch, Anderson explained his decision to join Plaid. The executive left Meta in March after a 10-year stint as the company’s head of payments and commerce.
Anderson says he was drawn to the space simply because “money is at the heart of everyone’s life.” “The world is becoming increasingly inequitable,” the executive said, describing access to finance as an “uneven playing field that’s getting tougher than ever.”
“What’s common among this exciting new generation of financial services is secure access to data, fast payments and helping them manage risk and compliance behind the scenes,” he said.
It’s not Anderson’s first foray into fintech. He developed a fintech application called Groupcard to get by InCommA $13 billion prepaid and payment technology company. He also once worked in eBay payments.
“As a former fintech app developer, I’ve experienced firsthand the challenges that many Plaid customers face today,” he said. “On a very personal level, I came to Plaid because I wanted to build sustainable products and a community impact that my grandchildren would be proud of.”